Hogg Robinson float grounded

By Harry Wallop

12:01AM BST 26 Sep 2006

Hogg Robinson, the travel agency, has pulled its stock market flotation after institutional investors failed to show any enthusiasm for the company.

Permira, the private equity owners of the company, was hoping the shares – which were due to start trading in a week's time – would be valued between 140p and 220p each. At the top of the range the company would have been worth £465m.

However, the grey market was suggesting that it was struggling to interest investors even at 150p a share. "They were not a distressed seller; they were not prepared to float at any price," said a source close to the company.

The company issued a terse statement to the Stock Exchange saying the delay was "due to present market conditions". Analysts pointed out that market conditions are virtually unchanged from when the company first announced its intention to float.

However, the source said that many of the potential investors were American investment banks, "and they looked around and saw the international economy is wobbly, especially in North America". Hogg Robinson's customers are large businesses, which use the company to book their executives on flights and into hotels. The postponement will be a set back for Permira, which had so far been enjoying a fairly successful year, selling its Travelodge business for more than expected and picking up the Birds Eye business from Unilever for £1bn.

However, it lost out in two of the most hotly contested auctions this year – for housebuilder McCarthy & Stone and for hotels group De Vere.

The other losers from the postponement are David Radcliffe, the chief executive of Hogg Robinson who along with 20 staff were expected to pick up about £25m for their 10pc of the company. At the float, the company intended to pump in £28.5m into the pension deficit – a headache that Permira will now have to solve by another route.

All eyes will now fall the upcoming float of Aer Lingus, which is expected to set its share price tomorrow. So far, the airline has attracted plenty of investor interest.